Hong Kong should set up rating agencies for virtual assets and consider developing the e-HKD, the city’s planned central bank digital currency (CBDC), into a stablecoin linked to decentralized finance, a Hong Kong lawmaker said in a media interview.

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Fast facts

  • Johnny Ng, a member of Hong Kong’s Legislative Council and a member of China’s advisory body, the Chinese People’s Political Consultative Conference, said in a Chinese media interview published Wednesday that a stablecoin-inspired CBDC could address the risks of Web 3.0 and virtual assets.
  • “The stablecoins on the market now are issued by private companies and are not subject to government regulation, and many worry about related risks,” Ng said, adding that Hong Kong could consider connecting e-HKD issuance with decentralized finance (DeFi).
  • Last month, the Legislative Council of Hong Kong passed an amendment to the bill that includes a licensing regime for virtual asset service providers, which will come into effect on June 1.
  • Financial services providers in Hong Kong, including brokers and fund managers, are seeking advice in anticipation of the new regulatory regime that will allow them to serve retail traders.
  • The Hong Kong Monetary Authority, the city’s de-facto central bank, said in September that the e-HKD wholesale system development can take up to three years. 

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